Don’t Get a Divorce – Unless You Can Afford To!

by Kevin M on February 19, 2013

in Marriage

It may seem strange to be talking about a topic like divorce on a personal finance blog. But I’m at that point in my life where even though I’ve never been through one myself, I’ve seen dozens of divorces, some involving family and close friends, and that has allowed me to see how the process works up close. If there’s one thing that I’ve learned it’s that divorce is always about money! So here’s some financial planning advice: don’t get a divorce unless you can afford to!

No Matter What The Initial Reason, Divorce Always Comes Down To Finances

Divorce and Finances

Whatever the initial stated reason for a divorce, it will ultimately come down to money. Once the couple separates and begin the divorce proceedings, it’s matter of hammering out a workable divorce settlement which will become legally binding. This is where money will become the central issue, even if it wasn’t a declared problem at the beginning.

The process then takes on the form of either a) trying to preserve income and assets, or b) trying to get a greater share of the others resources. Once that dynamic takes root, the reasons for the divorce become history, and the entire arrangement morphs into an attempt to negotiate a better money deal. A union born in love is reduced to a competition for dollars and cents.

Please don’t see this claim as an attack on women. As a woman, you are increasingly on the defensive side of this equation. Many women today earn more money and have more money than their soon-to-be ex-spouses. I know of several situations where the woman lost financially.

In one such divorce, the wife was the clear breadwinner while the husband did little in life. Upon divorce, he was required to pay some small amount of child support, while she was ordered to pay a much larger amount in alimony. And then there was the asset transfer. From a financial standpoint, she was the clear loser in the arrangement.

Most Divorces Are Caused By The “I’m Not Happy” And “Problem X Is Your Fault” Syndromes

Each divorce seems to start out with credible sounding reasons for going forward. Some reasons are truly serious, some mostly sound serious, and many more are plain frivolous to a reasonable mind.

When I was a kid, you didn’t get a divorce unless there was demonstrated physical abuse, rampant drug or alcohol abuse, or repeated infidelity or abandonment. But we live in a different world now – you can get a divorce for just about any reason.

The divorces I’ve seen always come down to some variation of either “I’m not happy (and it’s your fault)” or “we have Problem X (and that’s your fault too)”. I’m not sure why that is, but I’m going to guess that TV and the “you deserve to be happy in life” guru’s have a hand in it. We’re not content to have a reasonably good life, we also need to be happy – what ever that represents.

More significantly, I think this also drives the money chase in divorces. Pursuing happiness, after all, takes a certain amount of money. A divorce settlement, apparently, is a good place to start. And if it isn’t enough, you can even renegotiate later.

A Divorce Can Be The Biggest Financial Disaster In Your Life

We are often fascinated by the financial details of divorces involving the rich and famous. The prospect of millions of dollars in income, assets, and property being transferred from one party to the other can seem almost exciting. Perhaps it’s because we can project ourselves into the recipient’s shoes, and maybe even wish that was us. It’s not a stretch – it’s a suspected reason why juries will often award outsized settlements in civil lawsuits. It’s what they’d want a jury to do if they were bringing a suit.

If you’re not rich and famous however, the financial aspects of divorce can be even more devastating. A couple who were struggling financially during their marriage will see their financial situations get worse. Think about a middle-class family struggling to maintain a single household, that will now have to maintain two following a divorce. Not only will there be two house payments to make, but there will be all the other expenses that go with maintaining separate living arrangements.

The couple’s income will not rise as a result of the divorce, however their expenditures will grow substantially. In the end, that will improve no one’s situation.

Then there are legal fees. The dirty little secret of divorce (and of all legal disputes) is that no matter which party wins or loses, the lawyers always win.

We also have to think about how this works in an economy with fewer financial options than in the past. Job losses are common today, and one of the best protections against this is the two income couple. That disappears upon divorce, forcing each former spouse to fend for themselves in a crisis. And that’s often handled by re-petitioning the court for still more income and assets.

In addition, the emotional stress of a divorce can cause one or both spouses to experience a decline in income. Who will benefit from that?

If money has anything to do with why you want a divorce, you may want to rethink following through. Very few people improve their financial situation after a divorce, and many more see a steep decline.

In everything that we do, we always need to first consider the cost. Where divorce is concerned the financial costs are enormous.

You may go into divorce court thinking that you’ll come out driving a 2013 Mercedes. But don’t be surprised if you don’t instead come out driving a 1973 Ford Pinto.

Yes, there are times when there truly is no choice. But think long and hard if your circumstances really rise to that level. If not, you have more incentive to make your marriage work.

photo credit: mintlipgloss via photopin cc

© 2013, Kevin M. All rights reserved.

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{ 9 comments… read them below or add one }

1 Jerry

Get a prenup if you want insurance you get your portion of your wealth. It’s not just for the completely wealthy. It will lead to peace of mind for both parties.

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2 Jerry

I think a pre-nup is your insurance for not getting screwed in a divorce. Otherwise, it could lead to a sticky mess.

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3 Kevin@OutOfYourRut

That’s true Jerry. But it could also lead to never getting married in the first place. I do think it’s a good idea when there are substantial assets involved.

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4 Nunzio Bruno

This was a tough post to read because it made me sad thinking about the reality of a situation like this. I’m not married yet and this post got my gears turning a bit as far as the impacts on income and financial future for yourself and any family that you have at the time. I couldn’t agree more with one your last points thinking about the costs associated with every choice we make – indirect and direct alike.

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5 Kevin@OutOfYourRut

Hi Nunzio–The world has gotten to be a real complicated place! Things don’t always turn they way we plan, and even if they do it tends to be messier than we can ever imagine.

I’m old fashioned on this, but I think you do all that you can to keep your marriage together, and there should be a very short list of reasons that would cause you to file for divorce.

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6 Kevin@OutOfYourRut

Hi Shilpan–“Materialistic madness”–that’s an incredible description, but one that gets to the heart of so much of what’s wrong in so many places. Well said my friend!

I’ll probably use that term in future writings. Hope you don’t mind!

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7 Shilpan

Well said. No one wins in divorce. Only lawyers win. What we are seeing today is a culmination of materialistic madness that persists in our culture today. Very sad.

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8 KC @ genxfinance

LOL, true. There are a lot more benefits that you can get if you choose to make the marriage work; financially and emotionally.

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9 Kevin@OutOfYourRut

Hi KC–From what I’ve seen most couples learn that too late. It seems as if it’s more of a struggle to survive a divorce than it is to fix a marriage.

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